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BANK and BUILDING SOCIETY
A bank or building society account with free gifts, money boxes, competitions, letters, birthday cards, magazines and special promotions. Some banks have different gifts for different ages, e.g. under 9, 9-13, 14-17. The incentives change from time to time so check what is available before your child invests. Older children may be keener on higher interest or a cash dispenser card than low interest and special incentives.
Who can invest Children.
How worthwhile Usually good value for small amounts. A way to encourage children to save. Some of the banks have the best gifts but usually building societies pay better interest. Unsuitable for large amounts. Older children also consider Bank and Building Society Cash Card Account.
Minimum Usually £1 or £10.
Maximum Varies.
Suitable Lump sums. Regular savings.
Money back Usually immediately with no loss of interest. Cash card for machine withdrawal: If age 11 or over at Lloyds TSB (with parent's consent). Age 12 at Britannia, Nationwide. Age 13 at Midland, TSB. Age 14 at Barclays; Royal Bank of Scotland. Under 7 (11 Halifax; 12 Bristol & West) parent must countersign, over 7 child can withdraw on own signature. Lloyds TSB and Midland have cheque book at 16.
Interest Variable. Some pay more than others. Often better than an adult's account with a small balance.
Interest paid Added to account yearly, half-yearly, quarterly, monthly depending on the bank.
Tax 20% tax is deducted from the interest. Non-taxpayers can reclaim the tax from the Inland Revenue (or have interest paid without deduction). Higher rate taxpayers (e.g. where interest counts as a parent's income) pay extra. For how a child's income is taxed, see Children's Investments.
Fees to pay None.
Passbook Some do, most don't.
Risk 100% compensation scheme on the first £35,000 since 1 October 2007 for each investor in each licensed bank or building society under the investors compensation scheme.
How to invest Phone one of companies listed below at their special 'By Post' phone number.
Where from Best rates at : Click here for rates and more details.
Other Bank and Building Society Accounts
Last updated 15
December 2007.